Va. Courting Private Sector To Plan, Fund Road Projects

As Virginia's traffic problems expand and its transportation budget shrinks, the state has turned to private firms to finance, plan and build the next generation of roadways.

Some of Virginia's most ambitious road project proposals -- widening the Capital Beltway and Interstates 95 and 395, and doubling Interstate 81 -- are the result of offers from the private sector, most of them unsolicited. Several other major projects, such as adding interchanges to Route 28, also are the result of private initiatives.

Virginia is one of several states trying to tap the power of the private sector. Texas, for instance, is building an extensive network of private toll roads, while California, Florida and others are moving forward with similar initiatives.

Maryland joined the trend this year when it sought private proposals for the first time to build express toll lanes and other projects. Officials there are sifting through 17 plans and said they intend to meet with administrators from Virginia and elsewhere to learn more about the role private firms can play.

Transportation experts said the move toward greater private participation represents a departure from the last half-century of road construction, when governments financed most projects through gas taxes and other fees. But as those revenue bases have become less reliable and politicians less willing to raise taxes, states have looked to the private sector to fill in the gaps.

Governments will be "increasing their use of the private sector in constructing and even operating roads in the future," said Michael A. Pagano, director of the public administration program at the University of Illinois at Chicago. "And [the future] is now -- they're already doing it. It's going to grow even more and more."

Virginia officials have embraced private initiatives as a welcome lifeline in their struggles to overcome traffic problems across the state. To road planners the equation is simple: Virginia has little money and therefore little ability to address major needs. Private firms do. So the choice in many cases comes down to building something proposed by private companies or building nothing at all.

"If we're not going to get extra money out of the [federal government] and we're not going to get extra money out of the state and if the local government doesn't fund it, where's it going to come from?" said Leonard S. "Hobie" Mitchel, a member of the Commonwealth Transportation Board, the 17-person group that decides which roads get built. "One thing you can guarantee is if you don't do anything, it won't get better."

But "smart growth" advocates and some environmentalists say the turn to private initiatives creates a road system built according to what's easiest to pay for and not what eases the most congestion. They also say the projects still require a large investment by taxpayers and that too much power is placed with the Virginia Department of Transportation, an organization many Virginians have said they don't trust to manage taxpayer money.

Virginia opened the door to private participation in transportation projects nearly 10 years ago when state lawmakers passed the Public-Private Transportation Act (PPTA) of 1995. At the time, they envisioned private contributions complimenting state efforts. The proposals are financed in a range of ways, but they generally include tolls that firms use to repay bonds. They aren't completely private -- local, state and federal governments are typically asked to share a percentage of the costs, sometimes into the billions of dollars.

Initially, a handful of proposals trickled in, and the only privately built venture that has been completed -- the Pocahontas Parkway outside Richmond -- didn't open until 2002.

That project has had mixed results. Demand is barely half of what was expected, and the road's builder, Fluor Corp., is having trouble paying off its bonds, which have been downgraded to near junk status. So state officials agreed to raise tolls from $1.50 to $2 starting next month to generate more revenue. Fluor is also seeking approval to build an interchange to a new development to increase demand.

Those who question such projects say this scenario is exactly what they fear: A transportation network based on making money, not necessarily on improving traffic.

"This is not a way to set priorities in a transportation program," said Stewart Schwartz, executive director of the Coalition for Smarter Growth.

Nonetheless, the trickle of private proposals is becoming a torrent.

In addition to the unsolicited offers, the state is seeking proposals for the planned Western Transportation Corridor to connect I-95 in Stafford County to Route 7 in Loudoun County, a tunnel connecting Norfolk and Portsmouth, and a secondary highway between Richmond and Hampton Roads.

The state's biggest rail project, a 23-mile connection between West Falls Church and the Dulles area, will be the first leg of the Metrorail system to be built privately.

Localities, which have limited ability to build roads without state money, are also turning to private firms. Prince William County leaders said they plan to award their first PPTA contract this month. It will go to a company offering to build a $24 million road that had dropped off VDOT plans because the state lacked the money to build it.

Prince William officials said they are likely to ask for private proposals for other projects, including a refashioning of the Route 29 and I-66 interchange and widening of Route 1 -- projects that were delayed by lack of money.

"I don't think we have a choice," said Board of County Supervisors Chairman Sean T. Connaughton (R-At Large). "I think we can't help but look and say the state's not going to be there for us."

From the governments' point of view, the gains from private proposals can be significant.

The state's plans to widen the Beltway, for instance, called for spending as much as $3.25 billion to add four lanes and upgrade 10 interchanges on a 14-mile stretch. A private proposal asks the state to chip in about $100 million -- money it does not have -- to get four high-occupancy toll, or HOT, lanes and two interchanges on the same stretch of road. Even if the state had the billions to pay for its own plans, many officials say it would be hard to pass up those savings.

"If the state moves more to reliance on PPTA projects, what will get built are going to be projects that the private sector thinks they can make money off," said Trip Pollard of the Southern Environmental Law Center in Charlottesville. "That may not at all mesh with projects we believe will reduce traffic or air pollution."

Pollard and others also fret about the potential for abuse. Under the traditional bid process, VDOT identifies a need, companies submit sealed offers and the agency chooses the "lowest responsive bidder."

But PPTA projects are less structured. Essentially, companies that submit offers deal directly with VDOT officials and hammer out a deal. Some worry that this opens the door to favoritism.

"There's no question . . . that there's a potential for a lot of lobbying," said VDOT Commissioner Philip A. Shucet. "I can understand why people would have those concerns."

Shucet said his solution is to make the process as "open and transparent" as possible by establishing advisory panels and holding public meetings, neither of which is required by the PPTA.

Another common concern is that private proposals address problems that do not yet exist. One of the unsolicited proposals for the I-95/395 corridor, for example, calls for HOT lanes stretching from the District line to Spotsylvania County, some 60 miles away. Smart growth advocates and some transportation officials fear that attempts to make improvements like that will create more suburban sprawl.

"We should be going about this in a way that defines what it is we're trying to do first and then seeking private help," said Gerald McCarthy, a member of the state transportation board. "Otherwise, we're just at the mercy of whatever comes in the door."

Virginia Transportation Secretary Whittington W. Clement and other state officials acknowledge that private companies are driving much of the road planning and construction in Virginia but said that they would not go ahead with a project unless it made sense.

On the other hand, they said, there's only so much they can do without more money, even if they join with private firms.

"Certainly there's greater pressure on us to take greater opportunities to pursue other projects under the PPTA," Clement said. But "those who think that . . . the PPTA will be the panacea to meet our future construction needs will be greatly disappointed.

"The private sector, they're not in it just for their health," he said. "They're in it to make money."

Steven GinsbergSteven Ginsberg has been the National Editor at The Washington Post since 2017. Since joining The Post in 1994, he has been a copy aide, news aide, Business reporter, Metro reporter, Local Politics Editor, Senior Politics Editor and National Editor. He has been an editor on five Pulitzer Prizes, including two in 2018. Follow